💥Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Distribution: weekly

  • [pib] Saras Collection on Government e-Marketplace

    The Union Ministry for Rural Development and Panchayati Raj and Agriculture and Farmers’ Welfare has launched “The Saras Collection” on the Government e-Marketplace (GeM) portal.

    Possible prelim question:

    ‘The Saras Collection’ recently seen in news is a:

    a) Subsidy on beekeeping and apiculture projects

    b) Indigenous light transport aircraft

    c) Database on wetland birds

    d) Collection of products made by SHGs

     The Saras Collection

    • It is a unique initiative by the GeM, Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) and Ministry of Rural Development.
    • The collection showcases daily utility products made by rural Self-Help Groups (SHGs) and aims to provide SHGs in rural areas with market access to Central and State Government buyers.
    • The on-boarding of the SHGs has been initially piloted in the states of Bihar, Chhattisgarh, Jharkhand, Karnataka, Kerala, Himachal Pradesh, Maharashtra, Odisha, Rajasthan, Uttar Pradesh and West Bengal.
    • SHGs from all the states and Union Territories (UTs) will be covered rapidly in the upcoming phases.

    It’s functioning

    • For Functionaries: They will be provided dashboards at the national, state, district and block level for real-time information about the number of products uploaded, their value and volume of orders received and fulfilled.
    • Government buyers: They will be sensitized through system-generated messages/ alerts in the Marketplace about the availability of SHG products on the portal.

    Benefits offered

    • The Saras Collection will provide SHGs with direct access to Government buyers which will do away with intermediaries in the supply chain.
    • Thus it would ensure better prices for SHGs and spurring employment opportunities at the local level.

    Back2Basics: Government e-Marketplace

    • The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.
    • It was launched in 2016 to bring transparency and efficiency in the government buying process.
    • GEM aims to enhance transparency, efficiency and speed in public procurement.
    • It is a completely paperless, cashless and system driven e-marketplace that enables procurement of common use goods and services with minimal human interface.
    • It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users to achieve the best value for their money.
    • The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.
    • It has been developed by Directorate General of Supplies and Disposals (Ministry of Commerce and Industry) with technical support of National e-governance Division (MEITy).

  • What is Cinco de Mayo and why is it celebrated?

    Cinco de Mayo, or fifth of May in Spanish, also called Battle of Puebla Day, is an annual celebration observed in Mexico and the US that marks the former’s military victory on its soil over French forces in 1862.

    Possible mains question:

    Q. The French colonization attempts went beyond India and had a global reach. Comment.

    French advent in Mexico

    • In the 1860s, Mexico had been severely weakened by lengthy wars over the previous two decades – the Mexican-American War (1846-48) and the internal Reform War (1858-61).
    • As a result, in 1861, the then President Benito Juárez announced a temporary moratorium of two years on repaying Mexico’s foreign debts.
    • In response, troops from Britain, Spain, and France invaded Mexico, demanding reimbursement.
    • By April 1862, Britain and Spain negotiated with Mexico and withdrew.
    • France, which at the time was led by Emperor Napoleon III, decided to establish an empire in Mexican territories with the support of the local landowning classes.
    • France also intended to curb US power in North America.

    The Battle of Puebla

    • In late 1861, a French fleet attacked the Mexican port of Veracruz on the country’s eastern coast and landed a large army that drove the Juárez government into retreat.
    • As they moved from Veracruz to capital Mexico City, the French encountered stiff resistance from Mexican forces.
    • At Puebla, over 100 km ahead of Mexico City, a poorly equipped and outnumbered Mexican force decisively defeated the advancing French troops on May 5, 1862, killing over a thousand.
    • The event marked a significant political victory of Mexican republicans and President Juárez and helped establish a sense of national unity in the country.

    Cinco de Mayo: Present-day significance

    • In Puebla, Cinco de Mayo is celebrated annually with speeches, parades, and by reenacting episodes of the 1862 battle.
    • The city today houses a museum dedicated to the battle, and the actual battlefield is maintained as a park.
    • In the US, in the mid-20th century, the celebration became a way for immigrants from Mexico to express pride in their heritage.
    • Later, Cinco de Mayo also became popular with other demographics in the country when the festivities were linked with Mexican alcoholic beverages.
    • As the celebration assumed greater importance in the country, many have criticised the negative stereotypes of Mexicans that were perpetuated as a result, as well as the promotion of excessive drinking.

  • Environmental regulations: go or no go?

    As the world struggles to restart the economic activities amid the pandemic, various strategies are being advised to salvage the damaged economies. One amongst them is to cut down on the environmental standards to spur the economic activities. This article explains why India should not be short-sighted to lower the environmental standards.

    What is this fuss about environment and lockdown?

    • The lockdown exit strategies are focused on saving livelihoods.

    • But the lockdown is causing fiscal pressures on governments which further motivates it to lower the environmental standards, suspend environmental monitoring requirements and reduce environmental enforcement. (Well to save some bucks.)

    • And also in the belief that this is necessary to secure economic growth.

    • But it would be a mistake to assume that there is a trade-off between saving livelihoods and protecting the environment.

    • The crisis of COVID-19 has highlighted that improving the quality of air in our country is not a matter of choice but an emergency.

    How countries around the world are reacting?

    • The US announced a significant reduction in fuel efficiency standards for new cars.

    • This move could result in increased gasoline consumption by 80 billion tonnes, pumping increased carbon emissions into the atmosphere.

    • The US Environmental Protection Agency has announced that it will not be enforcing compliance with routine monitoring and reporting obligations of environmental protection, for an indefinite period.

    • 13 European ministers have been outspoken about resisting the temptations of short-term solutions in response to the present crisis- need to maintain and strengthen EU’s effective regulatory tools to stick to its 2030 climate goals.

    5 Arguments that Indian authorities that look into viz a viz environmental standards

    1. Pollution increases risk to COVID-19

    • People living in areas with higher levels of air pollution face increased risk of premature death from COVID-19.

    • New Delhi was the world’s most polluted capital city for the second straight year in 2019.

    • And India was also home to 21 of the world’s 30 most polluted cities, Swiss-based group IQ AirVisual said in a recent study.

    • The State of Global Air 2019 Report finds air pollution responsible for over 1.2 million deaths in China and India each, based on 2017 data.

    2. The poor are the most affected by air pollution

    • There is enormous inequality in the impact of the COVID-19 fallout.

    • Those who suffer the most from air pollution are the millions who live and toil in the open, who cannot afford air-purifiers or other mitigating measures, as also the elderly and children.

    3. Risk of future pandemics

    • There is good evidence that three-quarters of the emerging infectious diseases migrate from wild or domesticated animals into humans.

    • This includes Ebola, SARS, MERS and now COVID-19.

    • Deforestation, industrial agriculture, illegal wildlife trade, climate change and other types of environmental degradation increase the risk of future pandemics.

    4. Public support for environment protection

    • From Delhi to Sao Paulo, Bangkok to Bogota, the dramatic improvement in the quality of air and water in the most polluted cities around the world has been transmitted by social media.

    • This may well result in a groundswell of public support for measures to protect the environment.

    5. The environment will get the value it deserves

    • The corona pandemic will jolt the markets into giving a clean, healthy and sustainable environment the economic value it deserves.

    • There’s a possibility that the gulf between what markets value, and what people value, will close.

    Environment conservation as a silver lining in this Pandemic

    • We have never treated air pollution as a national emergency, failing to coordinate between the Centre and state governments.

    • The COVID pandemic has been declared a national disaster in India, under the National Disaster Management Act, 2005.

    • This legislation mandates the disaster authorities coordinate among themselves and take measures for the prevention and mitigation of the pandemic.

    • Preventing and mitigating the risks of COVID-19, therefore, means the mandate for the disaster authorities is also to tackle air and other forms of pollution head-on.

    Questions based on disasters have been a recurring theme in the UPSC. In 2014, a question was asked with respect to drought, the same could be asked about air pollution. In 2017 again a question based on role of NDMA and tsunami was aksed. In 2018, a question based on Sendai Framework was asked.

     

    Conclusion

    The NDMA is a platform which should be used to combat air pollution as an emergency, similar coordination will be required at an international level to continue to work towards reduced emissions under the Paris Agreement. It is a great pity that it takes a pandemic to bring the realisation that economic growth versus clean air is a false dichotomy.

    Back2Basics: NDMA

    • On 23 December 2005, the Government of India enacted the Disaster Management Act, which envisaged the creation of the National Disaster Management Authority (NDMA).
    • It is headed by the Prime Minister, and State Disaster Management Authorities (SDMAs) headed by respective Chief Ministers.
    • It aims to spearhead and implement a holistic and integrated approach to Disaster Management in India.

  • FCI to the rescue

    FCI, indeed, has remained a crucial topic from the examination viewpoint. Mostly it is highlighted for its issues, corruption and wastages in the godowns. Be it MS Swaminathan or the latest Shanta Kumar committee all focus on how to revamp this giant institution. This article, however, points to the relevance of the FCI in the times of pandemic and suggests areas where there is scope for improvement in fulfilling its role. Stay tuned to find out what are the major concerns with FCI which needs consideration by the government.

    A background check on FCI

    • The FCI was set up under the Food Corporations Act 1964.

    •  In its first decade, FCI was at the forefront of India’s quest of self-sufficiency in rice and wheat following the Green Revolution.

    • Its functions involved managing procurement and stocking grain that supported a vast Public Distribution System (PDS).

    • Over time it became a behemoth that had long outlived its purpose and Its operations were regarded as expensive and inefficient.

    • Even in the 1970s and 1980s, poor storage conditions meant a lot of grain was lost to pests, mainly rats; diversion of grain was widespread.

    What role can FCI play amid Covid-19?

    • The FCI has consistently maintained the PDS, a lifeline for vulnerable millions across the country.

    • In the middle of the COVID-19 pandemic, it can play a major role in avoiding hunger and starvation.

    • Before the lockdown, with 77 million tonnes of grains in its godowns, the FCI was facing a serious storage problem.

    • This was worrying not just because of a shortage of modern storage facilities but also because the FCI lacked a “pro-active liquidation policy” for excess stocks.

    • Post-COVID: FCI has opened up the godowns to release food stocks to those affected by the lockdown.

    • The FCI has also enabled purchases by States and non-governmental organisations directly from FCI depots, doing away with e-auctions typically conducted for the Open Market Sale Scheme (OMSS).

    • With rabi procurement underway in many States, it seems that the country will secure ample food supplies to cope with the current crisis.

    • Given the extended lockdown, the FCI is uniquely positioned to move grain across State borders where private sector players continue to face formidable challenges of transport.

    5 suggestions for the FCI to perform better

    1. Using roads along with rails:

    • The FCI is overwhelmingly reliant on rail, which has several advantages over road transport.

    • In 2019-2020 (until February) only 24% of the grain moved was by road.

    • The FCI has long recognised that road movement is often better suited for emergencies and for remote areas.

    • Containerised movement too, which is not the dominant way of transporting grain, is more cost-effective and efficient.

    • Now, more than ever, it is imperative to move grain quickly and with the least cost and effort, to areas where the need is greatest.

    2. Store grain near demand hotspot

    • The FCI already has a decentralised network of godowns.

    • In the current context, it would be useful for the State government and the FCI to maintain stocks at block headquarters or panchayats in food insecure or remote areas.

    • This would allow State governments to respond rapidly.

    •  It will also provide a sense of assurance and psychological comfort to vulnerable communities.

    • This is especially relevant for regions that are chronically underserved by markets or where markets have been severely disrupted.

    3. Release stocks over and above existing allocation

    • The central government need to look beyond the PDS and the Pradhan Mantri Garib Kalyan Yojana and release stocks over and above existing allocations.

    • This would provide flexibility to local governments to access grains for appropriate interventions at short notice and to sell grain locally at pre-specified prices until supply is restored.

    • This would allow the state government to engage in feeding programmes, free distribution to vulnerable and marginalised sections, those who are excluded from the PDS, etc.

    • In many States, there is a vibrant network of self-help groups formed under the National Rural Livelihoods Mission (NRLM) which can be tasked with last mile distribution of food aid other than the PDS.

    • Consultative committees presumably exist already in each State to coordinate with the FCI on such arrangements.

    4. Suspend FIFO principle

    • Typically, the FCI’s guidelines follow a first in, first out principle (FIFO).

    • FIFO mandates that grain that has been procured earlier needs to be distributed first to ensure that older stocks are liquidated, both across years and even within a particular year.

    • It is time for the FCI to suspend this strategy, that enables movement that costs least time, money and effort.

    5. Support the farmers trying to reach out to consumers directly

    • In many places, farmer producer organisations (FPOs) have been at the forefront of rebuilding these broken supply chains.

    • The FCI along with the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), is well placed to rope in expertise to manage the logistics to support these efforts.

    • NAFED has already taken the initiative to procure and transport horticultural crops.

    • The FCI should similarly consider expanding its role to support FPOs and farmer groups, to move a wider range of commodities including agricultural inputs such as seeds and fertilizers, packing materials and so on.

    Major concerns regarding FCI’s role

    • Cost of food subsidy: The first is a long-term concern regarding the costs of food subsidy.

    • An analysis of FCI costs spanning 2001-16 suggests that on average about 60% of the costs of acquisition, procurement, distribution and carrying stocks are in fact transfers to farmers.

    • Not all of what is counted as subsidy therefore represents a waste of resources.

    • The government needs to address the FCI’s mounting debts — an estimated ₹2.55 lakh crore in March 2020 in the form of National Small Saving Funds Loan alone.

    • Depressing food prices: A second concern is that extended food distribution of subsidised grain is akin to dumping and depresses food prices locally.

    • The depressed prices, in turn, affect farmers.

    The Covid-19 pandemic has brought into sharp focus the relevance of the FCI. This makes PDS and Food security in prelims as well as in mains examination focus area. So, questions based on the topic are likely to be asked by the UPSC, for ex- “The FCI’s role in providing succour has been proved many times in the past and it lived up to its reputation amid Covid-19 pandemic as well. In the light of the above statement, discuss the relevance of the FCI and suggest the ways to improve its performance in the times of disasters”

    Also consider a question asked by the UPSC in 2019, “What are the reformative steps taken by the Government to make the food grain distribution system more effective?”

    Conclusion

    In 2015, the Shanta Kumar report recommended repurposing the organisation as an “agency for innovations in Food Management System” and advocated shedding its dominant role in the procurement and distribution of grain. There is no doubt that the FCI needs to overhaul its operations and modernise its storage. At the same time, the relevance of an organisation such as the FCI or of public stockholding, common to most Asian countries, has never been more strongly established than now.

  • Why liquor sale matters to states?

    Following the ease of restrictions in the third phase of the nationwide lockdown, some of the most striking images showed long queues outside liquor stores around the country. The Delhi government announced a 70% hike in the price of liquor across categories in the capital.

    Aspirants must note:

    1. Purview of Excise duty (i.e. Petroleum and Liquor)

    2. Excise duty before and after GST regime

    3. Sources of state revenue etc.

    4. Argument relating to inclusion of Liquor in GST

    Why liquor matters?

    • Delhi’s “special corona fee” on alcohol underlines the importance of liquor to the economy of the states.
    • Manufacture and sale of liquor is one of the major sources of their revenue, and the reopening comes at a time when the states have been struggling to fill their coffers amid the disruption on account of the lockdown.

    How do states earn from liquor?

    • Liquor contributes a considerable amount to the exchequers of all states and UTs except Gujarat and Bihar, both of which have enforced prohibition.
    • Generally, states levy excise duty on manufacture and sale of liquor.
    • Some states, for example, Tamil Nadu, also impose VAT (value-added tax).
    • States also charge special fees on imported foreign liquor; transport fee; and label & brand registration charges.
    • A few states, such as UP, have imposed a “special duty on liquor” to collect funds for special purposes, such as maintenance of stray cattle.

    Share in revenue

    • A report published by the RBI last year shows that state excise duty on alcohol accounts for around 10-15 per cent of Own Tax Revenue of a majority of states.
    • In fact, the state excise duty on liquor is the second or third largest contributor to the category State’s Own Tax revenue; sales tax (now GST) is the largest.
    • This is the reason states have always wanted liquor kept out of the purview of GST.

    What exactly is State Excise?

    • Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called “State Excise” duty.
    • For most of the states, excise duty is the second largest tax revenue after sales taxes (state VAT).
    • Besides, a substantial amount comes from licences, fines and confiscation of alcohol products.

    What has changed with the State Excise after the GST regime?

    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • However, the Goods and Services Tax (GST), introduction in July 2017, subsumed many types of excise duty. Today, excise duty applies only on petroleum and liquor.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, central excise duty was replaced by Central GST because excise was levied by the central government. The revenue generated from CGST goes to the central government.

    What are the other sources of revenue for the states?

    • The states’ revenues comprise broadly two categories — Tax Revenue and Non-Tax Revenue.
    • Tax revenue is divided into two further categories: State’s Own Tax Revenue, and Share in Central Taxes.
    • Again, Own Tax Revenue comprises three principal sources:

    1) Taxes on Income (agricultural income tax and taxes on professions, trades, callings and employment);

    2) Taxes on Property and Capital Transactions (land revenue, stamps and registration fees, urban immovable property tax); and

    3) Taxes on Commodities and Services (sales tax, state sales tax/VAT, central sales tax, a surcharge on sales tax, receipts of turnover tax, other receipts, state excise, taxes on vehicles, taxes on goods and passengers, taxes and duties on electricity, entertainment tax, state GST, and “other taxes and duties”).

    Back2Basics: What is Excise Duty?

    • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
    • It is the opposite of Customs duty in sense that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

    Purview of excise duty

    • The GST introduction in July 2017 subsumed many types of excise duty.
    • Today, excise duty applies only on petroleum and liquor.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, excise duty was replaced by central GST because excise was levied by the central government. The revenue generated from CGST goes to the central government.

    Types of excise duty in India

    Before GST kicked in, there were three kinds of excise duties in India.

    1) Basic Excise Duty

    • Basic excise duty is also known as the Central Value Added Tax (CENVAT). This category of excise duty was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985.
    • This duty was levied under Section 3 (1) (a) of the Central Excise Act, 1944. This duty applied on all goods except salt.

    2) Additional Excise Duty

    • Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957.
    • This duty was levied on some special category of goods.

    3) Special Excise Duty

    • This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.
    • Presently the central excise duty comprises of a Basic Excise Duty, Special Additional Excise Duty and Additional Excise Duty (Road and Infrastructure Cess) on auto fuels.

  • How Remdesivir tricks coronavirus?

    A new research has found how Remdesivir treats coronavirus and described the exact mechanism of interaction between the virus and the drug.   Remdesivir is an experimental antiviral made by American pharmaceutical firm Gilead Sciences that was first developed to treat Ebola.

    DNA/RNA related terminologies, Genes and Genomes, etc. always find their way in UPSC Prelims.  Most recent one was-

    With reference to the recent developments in science, which one of the following statements is not correct? (CSP 2019)

    (a) Functional chromosomes can be created by joining segments of DNA taken from cells of different species.

    (b) Pieces of artificial functional DNA can be created in Iaboratories.

    (c) A piece of DNA taken out from an animal cell can be made to replicate outside a living cell in a laboratory.

    (d) Cells taken out from plants and animals can be made to undergo cell division in laboratory petri dishes.

    How Remdesivir kills coronavirus?

    • Remdesivir is designed to obstruct the stage of replication, when the virus creates copies of itself, followed endlessly by the copies creating copies of themselves.

    How does replication take place?

    • Once the virus enters the human cell, it releases its genetic material, which is then copied using the body’s existing mechanism.
    • At every stage of infection, various human proteins, virus proteins, and their interactions come into play.
    • At the replication stage, the key viral protein at play is an enzyme called RdRp (an enzyme is a kind of protein that speeds up chemical reactions within a cell).
    • It is RdRp that makes the copies, by processing components of the RNA of the virus.
    • University of Alberta researchers called it the “engine” of the virus in a paper last week, in which they described the action of Remdesivir against this “engine”.
    • In scientific literature, such an enzyme is called a polymerase (the p is RdRp stands for polymerase) or a replica.
    • In any case, this is the enzyme that is targeted by Remdesivir.

    And how exactly does Remdesivir target this enzyme?

    • In order to replicate, the virus processes raw material from the virus RNA, broken down by another enzyme with that specific function.
    • When a patient is given Remdesivir — the inhibitor — it mimics some of this material and gets incorporated in the replication site.
    • With Remdesivir replacing the material it needs, the virus fails to replicate further.
    • These coronavirus polymerases are sloppy and they get fooled, so the inhibitor gets incorporated many times and the virus can no longer replicate.

  • From informal to the formal economy: The crooked road

    The article discusses the issues around the informal workforce in the economy. What are the factors responsible for the high informal sector in India? How is this sector responding in times of COVID? Are there some easy solutions to mainstream the informal sector into our formal economy? These are some of the points one should ponder upon while reading this article.

    The vulnerability of the informal workforce

    • Developing countries such as India are economically vulnerable to Covid-19 because of the presence of huge informal workforce.

    • Lack of protection: This vast informal workforce, which has no labour, social or health protection, is woefully ill-equipped to cope with the medical and economic shocks of the virus.

    The humongous size of the informal economy in India

    • Share of the informal sector: As per Periodic Labour Force Survey, 2017-18, 90.6 per cent of India’s workforce was informally employed.

    • This estimate includes those who are employed in informal enterprises (unincorporated small or unregistered enterprises).

    • It also includes informal workers in the formal sector (workers in the formal sector who are not provided any social security benefits by employers).

    • Take another example: Between 2004-05 and 2017-18, a period when India witnessed rapid economic growth, the share of the informal workforce witnessed only a marginal decline from 93.2 per cent to 90.6 per cent. 

    • Covid effect: Looking ahead, it is likely that informal employment will increase as workers who lose formal jobs during the COVID crisis try to find or create work (by resorting to self-employment) in the informal economy.

    • Also, formal enterprises are likely to continue hiring informal workers as they seek more flexibility and attempt to cut labour costs to cope with the COVID-19 induced economic uncertainty.

    Why is the informal more favourable over the formal?

    • The basic reason: necessity to eke out a subsistence living in the absence of alternative employment opportunities.

    • The ‘not so basic’ reasons: Some self-employed persons choose to be in the informal economy voluntarily to avoid registration or taxation.

    • Many are deterred by the costs of formalisation or don’t see much benefit from formalisation.

    • Finally, the phenomenon of informalisation of wage employment in the formal sector is a consequence of formal firms trying to avoid payroll taxes and employer’s contributions to social security or pensions to reduce labour costs.

    Some solution to smoothen the crooked road

    • A multi-pronged and comprehensive approach is needed to facilitate the transition.

    • Labour intensive growth: It requires creating more formal jobs through labour-intensive growth so that informal workers can move to these jobs.

    • Registering and taxing informal enterprises: The Indian experience of compelling informal firms to register and become tax compliant through demonetisation and introduction of GST formalised them only in a legal sense.

    • There is a need for increasing productivity of informal enterprises and incomes of the informal workforce by providing them with technical and business skills, infrastructure services, financial services, enterprise support and training to better compete in the markets.

    • Promoting the path to entrepreneurship in the informal economy.

    • Many informal enterprises would welcome efforts to reduce barriers to registration and related transaction costs as they expect to reap the benefits of formalising.

    • Reducing decent work deficit: This requires protecting informal workers by providing them a social protection floor, ensuring a set of basic working conditions (adequate living wages, limits on hours of work and safe and healthy workplaces).

    A direct question based on the issue of the informal sector can be asked by the UPSC, for ex- “There is a humongous presence of the informal sector in the Indian economy. What are the factors responsible for this? Suggest ways to transform the informal sector into the formal sector.”

    Conclusion

    Questions around the role of government and who bears the onus of protecting workers deserve careful consideration in the backdrop of the rising incidence of informal employment in the formal sector and the growth of the gig economy. It is apparent that in our relentless pursuit of economic growth, we have ignored the voices of India’s informal sector for too long.

    Back2Basics: What is the informal economy?

    • An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.
    • Although the informal sector makes up a significant portion of the economies in developing countries, it is sometimes stigmatized as troublesome and unmanageable.
    • However, the informal sector provides critical economic opportunities for the poor.

  • E-Renminbi: China’s Official Digital Currency

    China in a significant move has launched a trial of digital yuan in four urban centres of the country for specific services even as the world grapples with the containment of Covid.

    What is a cryptocurrency? Discuss how a vibrant cryptocurrency segment could add value to India’s financial sector. (250 W)

    Prelims Perspective:-

    1. Subtle differences btn digital and virtual currency – e.g. Regulatory issues

    2. Which countries have official virtual currency – e.g. Petro of Venezuela

    e-RMB

    • It will be the electronic form of the renminbi, with a value equivalent to the paper notes and coins in circulation.
    • The People’s Bank of China, the country’s central bank, will be the sole issuer of the digital yuan, initially offering the digital money to commercial banks and other operators.
    • It will be launched in major cities of Shenzhen, Suzhou and Chengdu, as well as the Xiong’an New Area.
    • It aims to change the financial system in big ways — by cutting costs and making transactions easier, more convenient and more transparent.
    • The public would be able to convert money in their bank accounts to the digital version and make deposits via electronic wallets.

    Back2Basics: Cryptocurrency

    • A Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions.
    • It leverages blockchain technology to gain decentralization, transparency, and immutability.
    • The most important feature of a cryptocurrency is that it is not controlled by any central authority: the decentralized nature of the blockchain makes cryptocurrencies theoretically immune to the old ways of government control and interference.
    • It can be sent directly between two parties via the use of private and public keys.
    • Unlike decentralized cryptocurrencies, such as bitcoin, that allow users to transfer value with no central authority or third party involved, the government-backed digital currency is preferred.

    What are Blockchains?

    • Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent through the use of decentralization and cryptographic hashing.
    • Blockchain consists of three important concepts: blocks, nodes and miners.
    • Nodes can be any kind of electronic device that maintains copies of the blockchain and keeps the network functioning.
    • Miners create new blocks on the chain through a process called mining.

  • Back in news: International Whaling Commission (IWC)

    Iceland will not be hunting any whales in 2020. Iceland, alongside Norway and Japan, has frequently broken the International Whaling Commission’s 1986 worldwide moratorium, which indefinitely “paused” commercial whaling.

    Regarding IWC, we can expect a statement based prelim question asking-

    1) If IWC has a UN or any other parent organization

    2) If India is a member/observer etc.

    About International Whaling Commission (IWC)

    • The IWC is an Inter-Governmental Organisation set up by the terms of the International Convention for the Regulation of Whaling (ICRW) signed in Washington, D.C in 1946.
    • It aims to provide for the proper conservation of whale stocks and thus make possible the orderly development of the whaling industry.
    • The main duty of the IWC is to keep under review and revise as necessary the measures laid down in the Schedule to the Convention which governs the conduct of whaling throughout the world.
    • The body is the first piece of International Environmental Legislation established in 1946.
    • Commercial whaling was banned by the IWC in 1986 after some species were almost driven to extinction.
    • 89 countries have the membership of in IWC and all the member countries are signatories to this convention.
    • India is a member state of the IWC.

    Earlier reference

    • Japan has last year withdrawn from the IWC citing domestic reasons.
    • Thus, it resumed commercial whaling after 31 years, meeting a long-cherished goal of its traditionalists.

  • Strategy for calibrated opening of economy

    The article discusses the performance of India so far and the strategy for reopening of the economy. Dividing the districts based on the number of cases and adopting a suitable approach for opening the economy there while keeping the spread of the virus in control is suggested in the article.

    India performing better

    • While the OECD countries are reeling under the COVID-19 impact, India is clearly ahead of the curve.
    • This is not merely in terms of the confirmed cases in the country but is also strongly reflected in very low mortality numbers (8.5 deaths per lakh population) compared to other nations (4,040 in the UK and 1,930 in the US).
    • While the first cases were reported in most hotspot countries and India around the same time (last week of January), today, the outbreak is far more manageable in India than in most other countries.
    • It was pragmatic for a resource-poor country to be pre-emptive and declare a national lockdown when the total number of cases were still low at 500.
    • The subsequent growth of the pandemic clearly shows a perceptible decline in the number of cases due to the lockdown.
    • Though stringent, this was much-needed and a timely policy intervention by the government.
    • It is important, however, to appreciate the high and growing opportunity costs that are involved during a lockdown.
    • We must brace ourselves for long-term pandemic management (18 to 24 months) with significant economic impact on our lives.

    Policy interventions by government and two major concerns

    • The immediate costs of the lockdown are borne by the most economically vulnerable people in society.
    • This perhaps was the rationale behind the first round of economic policy interventions announced by the finance minister within a few days of the lockdown.
    • They targeted front-loading of cash transfers through PM-Kisan, support to construction workers, self-help groups, food distribution through the public distribution system, among others.
    • Two major concerns: Beyond welfare concerns, there are significant growth concerns that are mounting with every day of economic inactivity in the country.
    • Companies are struggling to honour payroll and maintain their workforce against cancelling orders and declining demand for their goods and services.
    • These in turn will lead to greater delays and defaults in loan repayments, thereby further weakening the fragile banking sector and struggling credit markets.

    The RBI’s intervention and increasing damage to the economy

    • The Reserve Bank of India stepped in for some timely monetary interventions.
    • However, the longstanding climate of risk aversion within the banking sector will mean that transmission of these monetary interventions is unlikely to be timely or adequate.
    • All eyes are set expectantly in one direction.
    • Historically, when economies are faced with major calamities, governments step in to stabilise the environment and boost confidence within the business community.
    • We have seen this response from all major economies disrupted by COVID-19 over the last several weeks.
    • India will not be an exception to this as the government fine-tunes its strategy to support and kickstart our immobilised economy.
    • The opportunity cost of time, however, is ballooning with each passing day.
    • Just like the spread of the virus, we are up against the full force and power of compounding.
    • Mindful policy interventions, when timed well, can cut growing losses and the misfortune of many.

    How the states are performing against Covid-19?

    • While we have succeeded in slowing the growth of the virus at the national level, the true gains and pains are at the state and local level.
    • As the data reveals, currently we have three states that have made remarkable gains and “flattened the curve” of COVID cases.
    • These are Kerala, Haryana and Tamil Nadu where recoveries are growing and active cases are rapidly declining.
    • States like Karnataka and Telangana are improving their recovery rates consistently, despite fluctuations.
    • Every state and local administration has to keep eternal vigil and double down on containment and testing.
    • They have to aggressively improve their contact tracing efforts with the help of their police who are trained in debriefing, call record mapping and have more manpower than public health departments of local administrations.

    The article contains the policy and governance aspects which are important from Mains Paper-2, and economic issues such as the size of the package and opportunity cost of time involved are important from the Mains Paper-3 perspective. Take note of these issues.

    What should be the strategy?

    • Given the scale and variation in infection control across the country, our national strategy needs to be informed and calibrated.
    • Currently, there are more than 300 districts in the country which have reported zero COVID-19 cases.
    • This can be confirmed quickly with some random testing and the lockdown can be lifted effective immediately.
    • Then there are about 225 districts which have reported less than 10 cases each.
    • With adequate ring-fencing at the level of the block where these cases are reported, these districts too can afford to lift their lockdowns.
    • There are, however, approximately 30 districts across the country which have reported large numbers of confirmed cases and are identified as “hotspots”.
    • The lockdown in these places needs to continue with some relaxations for basic trade and essential services.
    • Not surprisingly, these “hotspots” are also important economic centres of the country.
    • The capacity of the local administration to develop and enforce appropriate strategies of containment, contact tracing and testing, should determine their decisions to ring-fence and isolate blocks while allowing other parts of the district/city to resume economic activity.

    Way forward

    • Given the uncertainty of the virus, we seem prepared for large hospitalisation and care if the need arises.
    • The efforts now must be to further contain the growth of the infection.
    • Acting against the power of compounding: If the current rate persists, we will reach over lakh cases within three weeks. That is the power of compounding we are against.
    • Public health support team: Beyond knowledge sharing across states and adopting successful containment strategies from each other, there is a role for the central government in providing “NSG-like” public health support teams to states that need them.
    • Economic package: On the economy front similarly, the central government’s timely economic package should flatten the curve of exponentially rising opportunity costs across the sectors.

    Conclusion

    Given the relative scale and virulence of the COVID-19 virus in India, the odds seem stacked in favour of a calibrated opening of the economy.